syarikat takaful malaysia berhad · 2016. 7. 27. · the directors on 8 january 2016 declared an...

SYARIKAT TAKAFUL MALAYSIA BERHAD

NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS

QUARTER ENDED 30 JUNE 2016

1

1 Basis of Preparation

The unaudited interim financial statements have been prepared in accordance with MFRS 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board (“MASB”), IAS 34 Interim Financial Reporting issued by International Accounting Standards Board, paragraph 9.22 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”), and Guidelines / Circulars issued by Bank Negara Malaysia (“BNM”) and Shariah rulings and precepts. The unaudited financial statements have been prepared using historical cost basis except for certain financial assets and financial liabilities that are stated at fair value. The unaudited interim financial statements of the Group comprise the Company and its subsidiaries as at and for the quarter ended 30 June 2016. It also includes Takaful funds established in accordance with Islamic Financial Services Act, 2013 in Malaysia, which are managed and controlled by the Group and by the Company as operator of the fund. The statements of financial position and the statements of profit or loss and other comprehensive income of the Takaful Operator, Family Takaful Fund and General Takaful Fund are supplementary financial information presented in accordance with the requirements of BNM and Islamic Financial Services Act, 2013 in Malaysia to segregate assets, liabilities, income and expenses of Takaful funds from its own. The statements of financial position and profit or loss and other comprehensive income of the Takaful Operator include only assets, liabilities, income and expenses of the Takaful Operator, excluding the Takaful funds managed by it. The statements of financial position and profit or loss and other comprehensive income of the Family and General Takaful Fund include only the assets, liabilities, income and expenses of the family solidarity fund and General Takaful Fund that is set up, managed and controlled by the Takaful Operator.

The unaudited interim financial statements should be read in conjunction with the audited annual financial statements of the Group for the financial year ended 31 December 2015. The explanatory notes attached to the interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 December 2015.

2 Auditors’ Report The auditors’ report on the audited financial statements of the preceding year ended 31

December 2015 did not contain any qualification. 3 Seasonality of Operations The Group’s operations are not materially affected by seasonal or cyclical factors for the period

under review. 4 Unusual Items

There were no unusual items affecting assets, liabilities, equity, net income or cash flows in the current quarter ended 30 June 2016.




2

5 Estimates There was no material changes in the basis used for accounting estimates for the current

quarter under review. 6 Debt and Equity Securities

On 1 April 2016, the Company allotted and issued 4,339,855 new ordinary shares of RM0.20 each pursuant to the Long-Term Incentive Plan (“LTIP”). Other than the above, there were no issuance, cancellation, repurchase, resale and repayment of debt and equity securities for the current quarter under review.

7 Dividends

The Directors on 8 January 2016 declared an interim single tier dividend of 7.35 sen per ordinary share of RM0.20 each in respect of the financial year ended 31 December 2015 and the dividend was paid on 17 February 2016. No dividend was declared for the current quarter under review.

8 Segmental Reporting

Geographical Segments Malaysia Indonesia Consolidated RM’000 RM’000 RM’000 6 months ended 30 June 2016 Revenue from external participants 1,009,545 85,916 1,095,461

Profit before zakat and taxation 115,506 778 116,284

As at 30 June 2016 Segment assets by location of assets 7,075,155 539,396 7,614,551

6 months ended 30 June 2015 Revenue from external participants 915,842 80,149 995,991

Profit before zakat and taxation 112,113 (84) 112,029

As at 30 June 2015 Segment assets by location of assets 6,985,058 456,041 7,441,099




3

9 Investment Properties The valuation of investment properties has been brought forward without amendment from the

annual audited financial statements for the year ended 31 December 2015. 10 Material Events Subsequent to the End of the Period There is no material event subsequent to the end of the period under review that has not been

reported in the interim financial statements for the current financial quarter. 11 Financial Risk Management The Group’s financial risk management objectives and policies are consistent with those

disclosed in the financial statement as at and for the year ended 31 December 2015. 12 Effect of Changes in Composition of the Company / Group There is no change in the composition of the Group for the current financial quarter under

review. 13 Contingent Liabilities

There were no contingent liabilities as at the date of this announcement. 14 Review of Performance

For the 2

nd quarter ended 30 June 2016, the Group generated Operating Revenue of RM462.2

million as compared to RM433.5 million in the corresponding quarter of the preceding year. The half year Operating Revenue increased by 10.0% to RM1,095.5 million from RM996.0 million in the same period of the preceding year. The increase is mainly attributable to higher sales generated by both Family Takaful and General Takaful business.

For the quarter under review, Family Takaful recorded gross earned contributions of RM310.9 million as compared to RM287.3 million in the same period last year. For the 6 months period, Family Takaful generated gross earned contributions of RM599.6 million as compared to RM524.3 million in the corresponding period last year. The increase is mainly attributable to higher sales from Family Takaful Group Medical and Family Takaful mortgage related products. For the quarter under review, General Takaful generated gross earned contributions of RM119.4 million as compared to RM112.6 million in the corresponding quarter of preceding year. For the 6 months period, General Takaful recorded gross earned contributions of RM257.5 million as compared to RM248.8 million in the corresponding period last year. The growth was mainly from Fire and commercial classes.




4

14 Review of Performance (continued) The surplus transfer in the quarter under review from Family Takaful was RM20.6 million as compared to RM18.0 million in the same period last year. For the 6 months period, the surplus transfer from Family Takaful decreased by RM5.2 million to RM34.6 million as compared to RM39.8 million in the same period last year. The lower surplus transfer from Family Takaful is mainly due to lower realized gains on disposal of investments. For the quarter under review, the surplus transfer from General Takaful was RM4.6 million as compared to RM9.5 million in the same period last year. For the 6 months period, General Takaful recorded RM10.3 million as compared to RM16.1 million last year. The General Takaful reported lower surplus transfer mainly due to higher claims and realized losses on disposal of investments.

For the quarter under review, the Group recorded profit after zakat and taxation of RM45.4 million, increased by 16.4% as compared to RM39.0 million in the same period last year, mainly attributable to higher wakalah fee income. For the 6 months period, the Group recorded profit before zakat and taxation of RM91.7 million, increased by 7.5% as compared to RM85.3 million in the same period last year. The higher profit is attributable to higher wakalah fee income.

15 Material Changes in the Quarterly Results Compared to the Results of the Preceding Financial Quarter

There were no material changes in the quarterly results as compared to the results of the preceding financial quarter.

16 Current Year Prospects

For the year 2016, Takaful Malaysia will continue its value proposition of rewarding its customers with 15% Cash Back for General Takaful products and establish a strong foothold in the local insurance and takaful arena as the preferred choice for insurance. Through its extensive range of products and services, the Company continues to be the market leader in the Group Family Takaful business. The successful implementation of core initiatives in Operational Excellence, Technology Driven Capabilities, Product Innovation and Performance Oriented Culture will enable the Company to be ahead of its competitors, increase its overall market shares and continuously improving shareholders’ value.

17 Variance of Actual Profit from Profit Forecast or Profit Guarantee The Group did not issue any profit forecast nor profit guarantee during the current quarter

under review.




5

18 Taxation The effective rate of taxation is lower than the statutory tax rate mainly due to non taxable

income in accordance with the Income Tax Act 1967. Cumulative 3 months ended 6 months ended 30.6.2016 30.6.2015 30.6.2016 30.6.2015 RM’000 RM’000 RM’000 RM’000 Current tax expense: - Current financial period 9,790 9,537 24,248 19,958

Deferred tax benefits: - Current financial period 2,778 1,052 (99) 6,384

Total tax expense 12,568 10,589 24,149 26,342

19 Status of Corporate Proposal

There has been no new corporate proposal since the date of the last quarterly report. 20 Group Borrowings and Debt Securities The Group does not have any borrowings and debt securities as at 30 June 2016. 21 Material Litigation There was no material litigation pending as at the date of this announcement.

22 Earnings per Share Basic earnings per share (“Basic EPS”) Basic EPS of the Group is calculated by dividing the net profit attributable to ordinary

shareholders for the quarter / period by the weighted average number of ordinary shares in issue during the period. Cumulative 3 months ended 6 months ended 30.6.2016 30.6.2015 30.6.2016 30.6.2015 Owners of the Company (RM’000) 45,533 38,949 92,156 85,173

Weighted average number of ordinary shares in issue (‘000) 819,890 815,032 817,863 815,032

Basic EPS (sen) 5.55 4.78 11.27 10.45




6

22 Earnings per Share (continued)

Diluted earnings per share (“Diluted EPS”) The calculation of diluted earnings per ordinary share at 30 June 2015 was based on the profit

attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares, calculated as follows: Cumulative 3 months ended 6 months ended 30.6.2016 30.6.2015 30.6.2016 30.6.2015 Owners of the Company (RM’000) 45,533 38,949 92,156 85,173

Weighted average

number of ordinary shares in issue (‘000) 819,890 815,032 817,863 815,032

Effects of dilution (‘000) 3,219 4,744 3,219 4,744

Diluted weighted average number of ordinary shares in issue (‘000) 823,109 819,776 821,082 819,776

Diluted EPS (sen) 5.53 4.75 11.22 10.39




7

23 Takaful Contract Liabilities

The takaful contract liabilities consist of the following:

30 June 2016 31 December 2015

Gross Retakaful Net Gross Retakaful Net

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Family Takaful Fund

Provision for claims reported by participants 35,896 (6,157) 29,739 25,268 (4,104) 21,164

Provision for IBNR 163,255 (21,069) 142,186 157,702 (33,224) 124,478

Provision for outstanding claims 199,151 (27,226) 171,925 182,970 (37,328) 145,642

Actuarial liabilities 4,379,673 (140,721) 4,238,952 4,222,570 (242,477) 3,980,093

Unallocated surplus 668,715 - 668,715 791,232 - 791,232

AFS reserves (24,658) - (24,658) (62,755) - (62,755)

Translation reserves (911) - (911) (1,553) - (1,553)

Net asset value attributable to unitholders 228,029 - 228,029 208,145 - 208,145

Participants' fund 5,250,848 (140,721) 5,110,127 5,157,639 (242,477) 4,915,162

5,449,999 (167,947) 5,282,052 5,340,609 (279,805) 5,060,804




8

23 Takaful Contract Liabilities (continued)



RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

General Takaful Fund



Provision for outstanding claims 467,037 (277,934) 189,103 558,099 (366,877) 191,222 Provision for unearned contributions 312,018 (54,561) 257,457 297,773 (55,893) 241,880

779,055 (332,495) 446,560 855,872 (422,770) 433,102

Unallocated surplus 239,694 - 239,694 233,368 - 233,368

AFS reserves (4,492) - (4,492) (8,923) - (8,923)

Translation reserves 1,135 - 1,135 1,391 - 1,391

Participants' fund 236,337 - 236,337 225,836 - 225,836

1,015,392 (332,495) 682,897 1,081,708 (422,770) 658,938




9




RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Group



Provision for outstanding claims 666,188 (305,160) 361,028 741,069 (404,205) 336,864 Provision for unearned contributions 312,018 (54,561) 257,457 297,773 (55,893) 241,880

978,206 (359,721) 618,485 1,038,842 (460,098) 578,744

Actuarial liabilities 4,379,673 (140,721) 4,238,952 4,222,570 (242,477) 3,980,093

Unallocated surplus 908,409 - 908,409 1,024,600 - 1,024,600

AFS reserves (29,150) - (29,150) (71,678) - (71,678)

Translation reserves 224 - 224 (162) - (162)

Net asset value attributable to unitholders 190,790 - 190,790 170,115 - 170,115

Participants' fund 5,449,946 (140,721) 5,309,225 5,345,445 (242,477) 5,102,968

6,428,152 (500,442) 5,927,710 6,384,287 (702,575) 5,681,712




10


Participants' fund liabilities and its movements are analysed as follows:

Family Takaful Fund General Takaful Fund Group

Gross Retakaful Net Gross Retakaful Net Gross Retakaful Net

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2015 4,874,488 (206,644) 4,667,844 207,133 - 207,133 5,043,821 (206,644) 4,837,177

Net earned contributions 1,048,244 (61,312) 986,932 269,196 - 269,196 1,317,440 (61,312) 1,256,128

Investment income 215,276 - 215,276 29,031 - 29,031 244,307 - 244,307

Realised gains and (losses) 17,819 - 17,819 555 - 555 18,374 - 18,374

Fair value gains and (losses) (2,334) - (2,334) 330 - 330 (2,004) - (2,004)

Other operating income 2,859 - 2,859 8,243 - 8,243 11,102 - 11,102

Net benefits and claims (678,244) 52,183 (626,061) (63,937) - (63,937) (742,181) 52,183 (689,998)

Fees deducted (net) (225,047) - (225,047) (154,104) - (154,104) (379,151) - (379,151)

Other operating expenses (52,265) - (52,265) (6,027) - (6,027) (58,292) - (58,292)

Profit paid to participants (1,678) - (1,678) (22,244) - (22,244) (23,922) - (23,922)

Reversal of excess payment transferred to participants (846) - (846) - - - (845) - (845)

Increase in actuarial

liabilities 31,079 (34,959) (3,880) - - - 31,079 (34,959) (3,880)

Profit attributable to the

Takaful Operator (97,506) 9,129 (88,377) (40,464) - (40,464) (138,200) 9,129 (129,071)

Change in AFS reserve (877) - (877) (2,567) - (2,567) (3,444) - (3,444)

Withholding tax (9,166) - (9,166) (470) - (470) (9,636) - (9,636)

Effect of movement in

exchange rates 35,837 (874) 34,963 1,160 - 1,160 36,997 (874) 36,123

At 31 December 2015 5,157,639 (242,477) 4,915,162 255,836 - 255,836 5,345,445 (242,477) 5,102,968




11


Family Takaful Fund General Takaful Fund Group

Gross Retakaful Net Gross Retakaful Net Gross Retakaful Net

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

At 1 January 2016 5,157,639 (242,477) 4,915,162 225,836 - 225,836 5,345,445 (242,477) 5,102,968

Net earned contributions 599,646 (20,764) 578,882 161,286 - 161,286 760,932 (20,764) 740,168

Investment income 107,382 - 107,382 14,410 - 14,410 121,792 - 121,792

Realised gains and (losses) 2,222 - 2,222 (840) - (840) 1,382 - 1,382

Fair value gains and (losses) 10,378 - 10,378 - - - 10,378 - 10,378

Other operating income 1,513 - 1,513 40 - 40 1,553 - 1,553

Net benefits and claims (425,639) 28,459 (397,180) (63,278) - (63,278) (488,917) 28,459 (460,458)

Fees deducted (net) (177,068) - (177,068) (91,826) - (91,826) (268,894) - (268,894)

Other operating expenses (7,352) - (7,352) (896) - (896) (8,248) - (8,248)

Profit paid to participants (1,002) - (1,002) (1,558) - (1,558) (2,560) - (2,560)

Reversal of excess payment transferred to participants (346) - (346) - - - (346) - (346)

Increase in actuarial

liabilities (11,814) 101,580 89,766 - - - (11,814) 101,580 89,766

Profit attributable to the

Takaful Operator (26,948) (7,695) (34,643) (10,290) - (10,290) (36,447) (7,695) (44,142)

Change in AFS reserve 38,097 - 38,097 4,431 4,431 42,528 - 42,528

Withholding tax (8,828) - (8,828) (721) - (721) (9,549) - (9,549)

Effect of movement in

exchange rates (7,032) 176 (6,856) (257) - (257) (7,289) 176 (7,113)

At 30 June 2016 5,250,848 (140,721) 5,110,127 236,337 - 236,337 5,449,946 (140,721) 5,309,225




12

24 Takaful Operator Income

The takaful operator income consists of the following:

Takaful Operator Cumulative

3 months ended 6 months ended

30.6.2016 30.6.2015 30.6.2016 30.6.2015

RM'000 RM'000 RM'000 RM'000

Surplus transfer from:

Family Takaful Fund 20,562 18,031 34,643 39,761

General Takaful Fund 4,572 9,466 10,290 16,063

Wakalah fee income 129,446 94,334 294,254 222,575

Total Takaful Operator income 154,580 121,831 339,187 278,399

25 Investment Income The investment income consists of the following:

Takaful Operator Family Takaful Fund General Takaful Fund Group

3 months ended 3 months ended 3 months ended 3 months ended

30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015

RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

Rental income 180 183 2,314 2,457 214 186 1,555 1,335

Dividend income 968 1,636 4,897 8,769 605 1,272 6,470 11,677

Profit income 6,767 5,945 49,533 44,647 6,968 6,173 63,268 56,765

Accretion / (Amortisation) (253) (261) (1,240) (1,059) (292) (371) (1,785) (1,691)

Investment expenses (13) (12) (578) (514) (5) (11) (277) (232)

7,649 7,491 54,926 54,300 7,490 7,249 69,231 67,854




13

25 Investment Income (continued) The investment income consists of the following (continued):



30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015


Rental income 326 341 4,681 4,851 418 390 2,384 2,597

Dividend income 1,263 2,482 7,973 13,305 926 2,032 10,162 17,819

Profit income 13,012 11,701 98,152 88,840 13,717 12,687 124,881 113,228

Accretion / (Amortisation) (498) (553) (2,368) (2,088) (638) (749) (3,504) (3,390)

Investment expenses (20) (134) (1,056) (1,024) (13) (20) (454) (580)

14,083 13,837 107,382 103,884 14,410 14,340 133,469 129,674




14

26 Other Operating Income The other operating income consists of the following:



30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015


Service charged and management fee 2,570 2,586 - - - - - 460

Gain on foreign exchange 153 - - 52 - 9 153 61

Writeback of allowance for

impaired financing - 2 - - - - - -


impaired debts - - 2,539 571 1,371 - 3,910 -

Writeback of allowance for 2

impaired wakalah fee - 61 - - - - - 61 Gain on disposal of assets 15 91 - - - - 15 91 Other income - 362 - 1,260 30 - - 698

2,738 3,102 2,539 1,883 1,401 9 4,078 1,373




15

26 Other Operating Income (continued) The other operating income consists of the following (continued):



30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015


Service charged and management fee 4,863 5,001 - - - - - 936

Gain on foreign exchange 189 - - 52 - - 189 52


impaired financing 19 312 - - - - 19 312


impaired debts - - - - 14 - 14 -


Impaired wakalah fee receivables - 220 - - - - - 220

Gain on disposal of assets 32 76 - - - - 32 76 Other income 104 850 1,513 2,085 26 479 1,643 2,873

5,207 6,459 1,513 2,137 40 479 1,897 4,469




16

27 Other Operating Expenses The other operating expenses consist of the following:



30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015


Depreciation (2,715) (2,647) - - - - (4,137) (3,784)

Impairment losses (426) (475) (3,249) (3,312) (452) (610) (4,127) (4,397)

Loss from foreign exchange - - - - (146) - (146) -

Administration fees (34,883) (32,251) - 25 - - (34,873) (32,226)

Agency related expenses (2,030) (1,696) - - - - (2,030) (1,696)

Allowance for impaired debts - - - - - (2,556) - (1,985)

Allowance for

impaired financing - - - - - - - -

Debts written off - - (83) (19) - - (83) (19)

Other expenses (226) (404) (1,132) (2,124) (45) (421) (878) (2,187)

(40,280) (37,473) (4,464) (5,430) (643) (3,587) (46,274) (46,294)




17

27 Other Operating Expenses (continued) The other operating expenses consist of the following:



30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015 30.6.2016 30.6.2015


Depreciation (5,464) (4,997) - - - - (8,311) (7,278)

Impairment losses (1,854) (475) (4,008) (3,949) (562) (610) (6,424) (5,034)

Loss from foreign exchange - - - - (146) (3) (146) (3)

Loss from disposal of assets - - - - - - - -

Administration fees (83,884) (73,117) - - - - (83,884) (73,117)

Agency related expenses (2,752) (3,469) - - - - (2,752) (3,469)

Allowance for impaired debts - - (1,297) (116) - (3,913) (1,297) (4,029)

Allowance of

impaired financing - (235) - - - - - (235)

Debts written off - - (299) (514) - - (299) (514)

Other expenses (312) (843) (1,748) (3,487) (188) (220) (1,240) (3,860)

(94,266) (83,136) (7,352) (8,066) (896) (4,746) (104,353) (97,539)




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28 Fair Value Information

The table below analyses financial instruments carried at fair value by their valuation method.

Fair value of financial instruments Fair value of financial instruments carried at fair value not carried at fair value Total Carrying Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount 30 June 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Takaful Operator Financial assets Equity securities 54,819 - - 54,819 - - - - 54,819 54,819 Unit trusts 25,378 19,789 - 45,167 - - - - 45,167 45,167 Institutional Trust Account - - 21,936 21,936 - - - - 21,936 21,936 Islamic debt securities 3,605 289,913 - 293,518 1,907 - - 1,907 295,425 295,654 Investment in linked funds 37,239 - - 37,239 - - - - 37,239 37,239

121,041 309,702 21,936 452,679 1,907 - - 1,907 454,586 454,815

Family Takaful

Financial assets Equity securities 547,775 - - 547,775 - - - - 547,775 547,775 Unit trusts 154,079 58,026 - 212,105 - - - - 212,105 212,105 Institutional Trust Account - - 106,212 106,212 - - - - 106,212 106,212 Islamic debt securities 76,209 2,138,986 - 2,215,195 53,579 378,084 - 431,663 2,646,858 2,640,349 Malaysian Government

Islamic papers - 161,364 - 161,364 - 113,879 - 113,879 275,243 273,906

778,063 2,358,376 106,212 3,242,651 53,579 491,963 - 545,542 3,788,193 3,780,347




19

28 Fair Value Information (continued) Fair value of financial instruments Fair value of financial instruments carried at fair value not carried at fair value Total Carrying Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount 30 June 2016 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 General Takaful Equity securities 51,965 - - 51,965 - - - - 51,965 51,965 Unit trusts 19,054 2,579 - 21,633 - - - - 21,633 21,633 Institutional Trust Account - - 28,098 28,098 - - - - 28,098 28,098 Islamic debt securities - 323,199 - 323,199 4,482 5,000 - 9,482 332,681 333,079 Malaysian Government

Islamic papers - - - - - 32,848 - 32,848 32,848 32,550

71,019 325,778 28,098 424,895 4,482 37,848 - 42,330 467,225 467,325

Group Financial assets Equity securities 654,559 - - 654,559 - - - - 654,559 654,559 Unit trusts 198,511 80,394 - 278,905 - - - - 278,905 278,905 Institutional Trust Account - - 156,246 156,246 - - - - 156,246 156,246 Islamic debt securities 79,814 2,752,098 - 2,831,912 59,968 383,084 - 443,052 3,274,964 3,269,082 Malaysian Government

Islamic papers - 161,364 - 161,364 - 146,727 - 146,727 308,091 306,456

932,884 2,993,856 156,246 4,082,986 59,968 529,811 - 589,779 4,672,765 4,665,248




20

28 Fair Value Information (continued)

Fair value of financial instruments Fair value of financial instruments carried at fair value not carried at fair value Total Carrying Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount 31 December 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 Takaful Operator Financial assets Equity securities 72,128 - - 72,128 - - - - 72,128 72,128 Unit trusts 26,416 18,359 - 44,775 - - - - 44,775 44,775 Institutional Trust Account - - 21,411 21,411 - - - - 21,411 21,411 Islamic debt securities 3,809 274,848 - 278,657 1,945 - - 1,945 280,602 280,833 Investment in linked funds 38,030 - - 38,030 - - - - 38,030 38,030

140,383 293,207 21,411 455,001 1,945 - - 1,945 456,946 457,177

Family Takaful

Financial assets Equity securities 613,698 - - 613,698 - - - - 613,698 613,698 Unit trusts 159,036 60,869 - 219,905 - - - - 219,905 219,905 Institutional Trust Account - - 103,801 103,801 - - - - 103,801 103,801 Islamic debt securities 91,029 2,044,811 - 2,135,840 54,633 370,402 - 425,035 2,560,875 2,562,032 Malaysian Government

Islamic papers - 164,728 - 164,728 - 113,701 - 113,701 278,429 277,309

863,763 2,270,408 103,801 3,237,972 54,633 484,103 - 538,736 3,776,708 3,776,745




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28 Fair Value Information (continued)

Fair value of financial instruments Fair value of financial instruments carried at fair value not carried at fair value Total Carrying Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total fair value amount 31 December 2015 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 General Takaful Equity securities 62,179 - - 62,179 - - - - 62,179 62,179 Unit trusts 19,677 2,429 - 22,106 - - - - 22,106 22,106 Institutional Trust Account - - 27,429 27,429 - - - - 27,429 27,429 Islamic debt securities - 317,032 - 317,032 5,192 5,000 - 10,192 327,224 327,319 Malaysian Government

Islamic papers - - - - - 32,948 - 32,948 32,948 32,576

81,856 319,461 27,429 428,746 5,192 37,948 - 43,140 471,886 471,609

Group Financial assets Equity securities 748,005 - - 748,005 - - - - 748,005 748,005 Unit trusts 205,129 81,657 - 286,786 - - - - 286,786 286,786 Institutional Trust Account - - 152,641 152,641 - - - - 152,641 152,641 Islamic debt securities 94,838 2,636,691 - 2,731,529 61,770 375,402 - 437,172 3,168,701 3,170,184 Malaysian Government

Islamic papers - 164,728 - 164,728 - 146,649 - 146,649 311,377 309,885

1,047,972 2,883,076 152,641 4,083,689 61,770 522,051 - 583,821 4,667,510 4,667,501




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28 Fair Value Information (continued) The carrying amounts of cash and cash equivalents, and short-term receivables and payables reasonably approximate their fair values due to the relatively short-term nature of these financial instruments. It was not practicable to estimate the fair value of the Group’s investment in unquoted shares due to the lack of comparable quoted market prices in an active market and the fair value cannot be reliably measured. Please refer to respective note for the fair values of other financial assets and liabilities, together with the carrying amounts shown in the statements of financial position. Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. Level 1 fair value Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date. Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the identical financial assets or liabilities, either directly or indirectly. Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. Transfer between Level 1 and 2 fair values There is no transfer between Level 1 and 2 fair values during the period.




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28 Fair Value Information (continued) Level 3 fair value Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities. The following table shows a reconciliation of Level 3 fair values: Takaful

Operator Family

Takaful General

Takaful

Group RM’000 RM’000 RM’000 RM’000 Available-for-sale financial assets At 1 January 2015 38,259 84,900 26,154 149,313 Purchases 3,244 63,813 20,811 69,313 Disposal (18,555) - - - Maturities (3,244) (49,060) (20,811) (73,115) Gains and losses recognised in profit or loss

Investment income - realised 1,707 4,148 1,275 7,130

At 31 December 2015 / 1 January 2016 21,411 103,801 27,429 152,641 Gains and losses recognised in profit or loss

Investment income - realised 525 2,411 669 3,605

At 30 June 2016 21,936 106,212 28,098 156,246

29 Disclosure of interest expense, provision for and write off of inventories, gain or loss on derivatives and exceptional items

Disclosure of interest expense, provision for and write off of inventories, gain or loss on derivatives and exceptional items are not applicable to the Group and the Company.

30 Regulatory capital requirements

The Company’s capital management policy is to optimise the efficient and effective use of resources to maximise the return on equity and provide an appropriate level of capital to protect participants and meet regulatory requirements. The Company is required to comply with the regulatory capital requirement prescribed in the Risk Based Capital for Takaful (RBCT) Framework issued by Bank Negara Malaysia where Takaful operators are required to satisfy a minimum supervisory capital adequacy ratio of 130%. As at period end, the Company has a capital adequacy ratio in excess of the minimum requirement.




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30 Regulatory capital requirements (continued)

The capital structure of the Company as at 30 June 2016, as prescribed under the RBCT Framework is provided below:

As at As at 30.6.2016 31.12.2015

RM’000 RM’000

Tier 1 capital 1,264,539 1,167,906

Tier 2 capital (6,326) (30,374)

Deductions (135,487) (143,163)

Total capital available 1,122,726 994,369

31 Supplementary Financial Information on the Breakdown of Realised and Unrealised Profits

The breakdown of the retained profits of the Group and of the Company as at 30 June 2016,

into realised and unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of the Listing Requirements, are as follows:

As at As at 30.6.2016 31.12.2015

RM’000 RM’000

Total retained profits of the Group

Realised 489,322 457,358

Unrealised 34,333 34,234

523,655 491,592 Total share of retained profits of associates:

Realised - -

Unrealised - -

523,655 491,592 Add: Consolidation adjustments 16,265 15,450

Total retained profits as per statements of financial position 539,920 507,042

The determination of realised and unrealised profits is based on the Guidance of Special Matter

No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to the Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

By Order of the Board MOHAMAD ASRI BIN YUSOFF Company Secretary (MIA 14171) Kuala Lumpur, 27 July 2016

syarikat takaful malaysia berhad · 2016. 7. 27. · the directors on 8 january 2016 declared an...

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